Airlines hit by COVID-19 start applying for government aid
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Friday is the first deadline for airlines to apply for $50 billion in federal loans and grants to help them survive this public health crisis.
The money comes with conditions. Airlines have to keep their employees on the books, and they have to maintain a certain number of flights, even if that means empty planes.
The drop off in the number of people flying has been dramatic, according to airline industry analyst Robert Mann.
“The traffic and associated revenue has essentially gone down almost 94% from the year prior in about 4 weeks,” Mann said.
He says United, Delta and American have parked almost their entire international fleets, and domestically will fly about 60% to 70% fewer flights than at this time in 2019. And the flights that are still flying are losing money, Mann adds, because they’re not carrying many passengers.
But, to qualify for the full government assistance, Airlines can’t just ground all their planes. They can reduce the number of flights, but have to maintain service to major hubs.
According to Samuel Engel, aviation consultant at ICF, that’s explained by the same logic that says airlines are important enough to the economy to need a bailout in the first place: that airlines are a “critical national infrastructure,” carrying health care and other essential workers right now, as well as goods and supplies.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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